Does interest rate parity exist between the two countries, Ask an Expert

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Does Interest Rate Parity exist between the two countries for each of the scenarios below? Show your calculations and indicate “Yes” or “No” in your answer.

US annual interest rate 3.50%, UK annual interest rate 2.70%,Spot rate $2.1000, 365 day quoted Forward rate $2.1140.

US 6-month interest rate 1.55%, Japan 6-month interest rate 0.50%, Spot rate $0.0098,6-month quoted Forward rate $0.0099.

US 90-day interest rate 0.75%, Germany 90-day interest rate 1.15%, Spot rate $1.3300, 90 day quoted Forward rate $1.3220.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92386722

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